The cost of bringing up baby

Attention new parents: That precious bundle of joy is going to cost you, well, a bundle, and then some.

Try $245,340, to be precise.

That number, from the U.S. Department of Agriculture, represents how much it will cost a middle-income, two-parent family to raise a child born in 2013 until age 18. That averages out to about $14,000 a year.

And in case you’re in serious sticker shock, the nearly quarter of a million dollars doesn’t include costs associated with pregnancy, college, or expenses if a child lives at home after age 17.

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The USDA has been publishing its annual “Cost of Raising a Child” report since 1960 as a way to help parents plan financially for the future and to assist those thinking of starting a family. The government report focuses on food, housing, clothing, health care, child care and education — expenses every parent can relate to.

In its 2014 report, released in late August, the department said the expenses associated with raising a child to age 18 rose 1.8 percent from 2012. As in past reports, families in the urban Northeast will pay more, roughly $282,480. That was followed by families in the urban West ($261,330) and urban Midwest ($240,570).

Families in the urban South ($230,610) and rural areas of the country ($193,590) will pay substantially less on average.

Other noteworthy statistics:

Housing costs, including mortgage payments, taxes, maintenance and furnishings, are the largest expenditure, averaging a third of the total costs. Child care and education was the second largest expense, followed by food.

Health care expenses for a child have doubled as a percentage of total child-rearing costs since 1960. On the other hand, the cost of child care was “negligible” in 1960 compared with all the money families pay today, the report said.

Family income, not surprisingly, affects child-rearing costs. Middle-income families with income from $61,530 to $106,540 can expect to pay $245,340 to raise a child until age 18, families earning more are likely to spend $407,820, according to USDA research.

The USDA data confirm what many parents know all too well — expenses increase in the teen years, particularly for food and gasoline and other transportation costs.

We all know that raising kids can be a financial drain; the USDA report just puts some meat on the bone. But the money message is equally clear: Get in the practice of budgeting and saving money in as many ways as possible to keep control of child-related household expenses. The sooner you develop that mindset, the more control you’ll have in making financial choices.

Take child care.

The experts at Care.com, a website devoted to helping parents find and manage family care expenses, noted in a June survey of 700 parents that most don’t budget for child care and knew little about savings strategies. Check out the website’s pay and nanny tax calculators to determine how much you can afford to spend.

What else can you do? If your employer offers a flexible spending account for child care expenses, take advantage of it during this fall’s benefits enrollment season. Families can set aside up to $5,000 in pre-tax dollars for child care expenses.

If that’s not an option, there’s always the child care tax credit, which allows you to itemize up to $3,000 in expenses per child per year, up to a $6,000 annual cap per family.

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